Partnerships / Acquisitions

Ant Hikes MoneyGram Bid To $1.2B

The bidding war — as has been widely predicted — may well be on for MoneyGram.  According to reports out this morning, Ant Financial has raised its bid on MoneyGram International by over a third to $18 per share in cash, valuing MoneyGram at around $1.2 billion.

Ant’s plans to push its U.S. expansion with the purchase of the U.S.-based firm hit a major snag when also U.S.-based Euronet Worldwide Inc made an unsolicited offer. They followed up that billion dollar bid with a sustained campaign of pushing regulators to reject the Ant Financial deal for reasons of national security.

The new offer easily pushes past the $15.20 per share proposed by Euronet and represents a 9 percent premium to MoneyGram’s last traded share price on Thursday.

As of now, Euronet has no comment.

And even if the new bigger bid does scare Euronet off, Ant has some regulatory hurdles to clear — including the Committee on Foreign Investment (CFIUS), which looks at acquisitions for national security risks.

CFIUS has, over the last 18 months, stopped a few China-U.S. deals — and Euronet is likely to be more agreeable to U.S. policymakers because of rising tensions between the two nations over trade policy.  But most think CFIUS is a scalable hurdle.

“CFIUS may lengthen the process…I don’t think CFIUS would be a deal killer,” said Jeffrey Sun, Shanghai-based partner with law firm Orrick, Herrington & Sutcliffe.

Euronet has argued that allowing the acquisition to go through could make life difficult to law enforcement looking to cut off money laundering and the financing of international terror organizations.

Ant has responded that MoneyGram will operate as an independent unit and that any data collected on MoneyGram users in the U.S. will continue to reside on U.S.-based servers. Ant and MoneyGram have also affirmed that they’ve made progress on regulatory issues — and they expect the deal to close by the end of the year.

Dallas-based MoneyGram provides services in 350,000 locations across 200 countries — it would be Ant’s most major purchase in the West to date. It comes as part of a massive international push by Ant, which has in the last year also made big investments in India, Thailand, South Korea and the Philippines.

Ant, which is planning an IPO, was valued at around $60 billion as of the middle of last year.  It has since had another financing round which raised $3 billion, though its latest valuation is not public.

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